Stimulus Checks Arrive: Is Bitcoin Set to Hit Another Record High?

US retail traders are gearing up to put billions of dollars into the bitcoin market when stimulus payments begin entering bank accounts later this week, adding more speed to a trading frenzy that swept the cryptocurrency industry last year.

Small investors are likely to buy almost $40 billion worth of bitcoin and rival cryptocurrencies when the payments, part of US President Joe Biden’s $1.9 trillion spending package, gets transferred in coming days, according to a survey conducted by Mizuho Financial Group, a Japan-based banking firm.

The Mizuho analysts, led by Dan Dolev, surveyed 235 people with a maximum income of $150,000 or less, with 40 percent responding that they would utilize a portion of their stimulus money to invest in bitcoin or stocks. Mizuho noted that that would roughly bring about $40 billion into the cryptocurrency market, out of the total $380 billion in stimulus checks.

The survey also concluded that most retail investors would rather put money in bitcoin than in stocks. The cryptocurrency attracted 61 percent yay votes versus 39 percent for equities, raising its likelihood to swell its market capitalization by an additional 2-3 percent.

More Funds Incoming

The coming deluge in the Bitcoin market underscores the large role retail investors — stuck at home due to coronavirus lockdowns with spare time and cash — can play, armed with free trading platforms.

Their presence has ensured that even the most bearish stock like GameStop rallies by hundreds of percent in a single day. Similarly, an almost useless token like Dogecoin gets to beat some of the most bullish cryptocurrencies by logging higher sessional profits. The flow of money from the previous government has given these traders the tools to play the markets.

Meanwhile, Robinhood, the free trading app in the US—which offers stock and bitcoin trading services, has already sent a newsletter to its customers, stating that the stimulus has arrived. The previous $900bn stimulus package followed up with a 7 percent increase in funds by Robinhood clients. With Mr. Biden’s 1.9 trillion dollar aid, the deposits on the platform expect to rally higher.

“We thought that last year was an over-the-top year, with the big increase in the market being driven by retail,” Richard Repetto, an analyst at Piper Sandler, told FT. “This year is not just a continuation of that momentum; it’s a step up.”

Bitcoin Holds Support

The Bitcoin market continues to hold onto its crucial technical support areas, having corrected sharply from its recently-established record high of $61,788 (data from Coinbase).

As of Wednesday, the benchmark cryptocurrency maintained a price floor above $55,000 as traders kept a close eye on the Federal Reserve to see whether they address the recent rise in long-dated Treasury yields. Rate-setters at the central bank started a two-day policy meeting, and its chairman Jay Powell will speak on Wednesday about their future decisions.

Rising yields have helped to take the US dollar out of its yearlong bearish slumber.

In turn, that has diminished the appeal of safe-haven assets like bitcoin in the short-term. Loose monetary policy, progress in COVID-19 vaccinations, and Mr. Biden’s stimulus have helped lift the cryptocurrency higher in recent months. But any signs of the Fed getting worried about rising inflation could dent the Bitcoin rally and move investors toward the US dollar.

Conversely, any indications show the Fed’s willingness to address the rising yields could have the central bank reallocate its $120bn monthly asset purchase program to long-dated Treasuries. Or, it could expand its bond-buying program altogether, thus leading the yields lower.

In turn, that would help Bitcoin continue its uptrend—towards a new all-time high.

Source: Bitcoininst

Elon Musk is selling his tweet as an NFT and the highest bid is over $1.1 million

Billionaire Elon Musk appears to be selling a recent tweet of his as an NFT, or non-fungible token.

“I’m selling this song about NFTs as an NFT,” Musk, CEO of SpaceX and Tesla, tweeted on Monday.

In the Twitter post, Elon released a techno song with the lyrics: “NFT for your vanity. Computers never sleep. It’s verified. It’s guaranteed.”

There is also a short futuristic video loop, which shows a trophy labeled “Vanity Trophy” with the term “NFT” at its top and “HODL,” a nod to a cryptocurrency community term meaning to hold a coin rather than sell, repeated across its bottom.

NFTs are unique cryptocurrency tokens used to represent digital assets, including jpegs and video clips. NFTs can be bought and sold, just like physical assets. And since they run on blockchain, a decentralized digital ledger that documents transactions, ownership and validity of the asset the NFTs represent can be tracked.

Musk’s tweet, including his caption, clip and song, was listed for sale as an NFT on “Valuables,” a platform released by Cent, a social media network built on blockchain. The highest offer is currently from Sina Estavi, CEO of Bridge Oracle, for $1.12 million as of Tuesday morning, the website shows. (“Valuables” requires users to log on to the platform via their Twitter account to verify that tweets listed for sale are done so by their true creators.)

According to “Valuables,” the tweet itself will “continue to live on Twitter,” but the winning bidder would…

See Tweet and continue reading at CNBC.COM

 

Why Did Bitcoin Crash Overnight?

Bitcoin price is down more than 10% from the weekend’s new all-time high set above $60,000 after an overnight selloff. The now sizable correction was first assumed to be a massive whale dumping more than $1 billion in BTC on crypto trading platform Gemini, but ultimately turned out to be something else. Here’s what actually caused the correction, and why the market was so easily shaken by what was ultimately a non-event.

Whale Watching: Bitcoin Price Slides More Than 10% After $1B BTC Transfer

Bitcoin price broke above resistance this weekend, causing the leading cryptocurrency by market cap to blast off to a new record high of $62,000. The breakout pattern appeared similar to the rise from the previous range, but due to the lack of momentum matching the post-Tesla BTC buy, price action has since toppled over.

The initial cause of the selloff was due to alerts triggering that 18,961 BTC – more than $1 billion in Bitcoin at the time – was moved to cryptocurrency exchange Gemini. The crypto community, driven by speculation, began taking profit, hedging positions, and more, anticipating a larger selloff caused by a whale of such size dumping their coins.

Starting late Sunday evening into the overnight Monday hours, the selloff began. Bitcoin has now sank a total of 10% from the weekend’s highs, but as the dust settled this morning, it was revealed that the massive BTC transfer wasn’t made by a whale at all.

Why Was The Crypto Market So Easily Shaken By Fake News?

According to data from blockchain analytics firm glassnode, the more than $1 billion in BTC was an internal transfer made at cryptocurrency exchange Gemini. Bitcoin expert Willy Woo says this is now the second time false data has caused a selloff in the market, so why are investors and traders so antsy?

Most Bitcoin investors are well in profit, and understand enough about the cryptocurrency to know that those gains can evaporate at the drop of a dime. Past bull markets culminated with a $17,000 and 84% collapse in the months after, and that was at a price of just $20,000 per coin.

An 84% crash from current prices, or even a 60% drop from Black Thursday standards, would take the price per coin back to between $11,000 to $24,000. And while that might sound extreme, data shows that Bitcoin has done it several times in the past, and could very well do it again.

That fact alone, has investors and traders who are sitting on fat profit ready to jump the gun.

Source: Bitcoininst

Explaining Bitcoin’s Rise From $6k to $56k in a Single Year

One year ago — on March 12th, 2020 — bitcoin was trading at $6,131 per coin. It had been valued at more than $12,000 in June 2019. But markets everywhere were in a bit of a panic last March, and stocks were trading near the lowest level of the year. BTC sold off during the initial crash, just like almost everything else.

But it was pretty clear to me this would ultimately prove to be a great BTC buying opportunity. Because I knew how the Federal government and Federal Reserve were going to react. They were going to print and spend gobs of money, which would almost certainly drive further adoption of bitcoin. 

Here’s what I wrote last March in “Bitcoin Was Made For Times Like These,” discussing the $6 trillion stimulus package. Bitcoin was trading at around $6,642 at the time.

I don’t see anything that can stop the money-printing tsunami that is coming. There’s too much debt in the system, too little savings and too little income with the economy being basically shuttered over COVID-19…

Bitcoin was created as a response to reckless government spending, bailouts and money printing. Despite incredible odds against the experiment working, it caught on.

Bitcoin’s purpose is to serve as a decentralized alternative to the existing fiat money system. I believe we’re about to see exactly why this is an important and worthy goal.

I finished that article by citing something I wrote in January 2019.

Bitcoin is in a fantastic place today. The world simply doesn’t understand what it is yet. It’s a monetary revolution in the making, and most people are still eyeing it like it’s a strange, speculative toy.

The general public will come to understand bitcoin with time and, unfortunately, this will accelerate as more financial crises arrive to sharpen its attention.

A Spike In Realization, Then Price

The broader public is finally starting to understand the bitcoin story. Why it was created. What it is trying to accomplish. And the implications all of that holds. 

They are beginning to realize this due to the bloated state of our financial system. The debt, money printing, unfunded liabilities, etc. It has become too glaring to ignore.  This is ultimately what’s driving bitcoin — and the broader crypto market — higher. 

When so many people come to such a dramatic realization at once and want to hedge themselves against inflation and fiat issues, you get the sort of price action we’ve seen in bitcoin over the last year. Combine it with an institutional bitcoin investor boom and the halving that cut new BTC supply in half last spring, and you get explosive growth.

Sure, some new crypto buyers are just in it for a short-term trade. But savvier ones will stick around for the long run — especially the new institutional investors that are flocking in. So I believe this bull run still has significant upside. Sure, there will be gnarly corrections. But the fundamentals driving adoption aren’t going away anytime soon.

Stimulus Unending 

The COVID-19 crisis was the catalyst for this current splurge in debt and stimulus. But I think if it wasn’t that, it would have been something else. America was already running $1T+ deficits in 2019, with $122T+ unfunded government liabilities. We were already well on our way to Modern Monetary Theory (MMT) before this all began, as I noted back in November 2019.

COVID moved up the monetary timetable significantly. And the response has been staggering so far. I suspect support/stimulus packages will continue and even increase over coming years. They cannot stop at this point. We need ultra-low interest rates, huge government spending and money printing just to maintain the status quo. There’s simply too much debt in the system.

Money Printer Go Brrrr Meme

If the Fed Funds rate rose from 0.25% to 3-4% (lower than the roughly 5% long-term average), the financial world would implode. We saw what happened in 2018 when the Fed tried to raise rates. Disaster. Companies and governments would start to drown in the interest costs alone.

Our nation’s financial situation is also dire at the personal level. More than half of Americans have less than $1,000 savings today. That number was as high as 70% before COVID in 2019! All the stimulus has actually helped increase personal savings. It’s “working” — but people in the U.S. will continue to require significant government benefits going forward to keep the economy afloat.

Further, I believe the U.S. will eventually move to a Universal Basic Income (UBI) model, where everyone is guaranteed a certain level of income. We’ve completed three rounds of stimulus checks now. I expect more will follow, then eventually UBI.

The nation will become increasingly dependent on government largesse. And as the late economist Milton Friendman said “Nothing is so permanent as a temporary government program.

But Where’s The Inflation?

I do believe we will eventually see troubling levels of inflation. In fact, one could argue that we already have fairly high real inflation. Take a look at the research of Dr. John Williams — founder of ShadowStats — who calculates inflation using the old (official) Consumer Price Index (CPI) methodologies from 1990 and 1980. Using those methods, he comes up with alternate readings of around 5% to 8.5% real inflation, respectively. Needless to say the new, “modern” way inflation is calculated happens to make it look a lot lower than it used to.

Here’s what Williams’ alternate inflation measure looks like (in blue) compared to the official number (in red).

Consumer Inflation - Official vs. ShadowStats Alternate

This “real inflation is higher than reported” notion is (slowly and reluctantly) becoming more widely appreciated. It’s now being discussed by major analysts such as Michael Every, Head of Financial Research in the Asia-Pacific region for Rabobank (Rabobank is a giant Dutch financial firm, one of the 30 largest in the world). 

Every recently discussed some ways in which official inflation statistics are manipulated in “Inflation Is Being ‘Hidden’ Because Belief In Our Whole Fantasy System Is Collapsing.” Here’s an excerpt.

“…is inflation being ‘hidden’? If so, let’s not forget US CPI has long had ‘hedonic adjustments’ that presume goods such as clothing and books get “cheaper” as their price goes up because they are “better”; and since 1999 it has used a geometric not arithmetic mean to assume when beef goes up, consumers buy chicken, so inflation stays lower overall. Would they want to actively hide inflation though?

To me, it seems clear that inflation is already a fairly serious problem — and that it’s likely to get worse over time. However… it is important to remember that the dollar remains the world’s reserve currency. And a LOT of people and nations around the world still rely on it for commerce and as a reserve asset.

So as we “debase” our money by printing and spending more, any “pain” is shared by everyone who holds dollars around the world. As a result, I believe MMT and debt monetization are actually going to work pretty well for a while. For a time, it will seem as if we are printing our way to prosperity. And those calling for an imminent dollar collapse will likely continue to be disappointed for many years to come. Eventually it seems likely that other countries will begin to shift away from the dollar as it is slowly debased, but these things take a long time to play out.

Importantly, inflation could still get rather nasty over the next few years. I could easily see prices increasing more than 10% annually within a few years. That sort of inflation can quickly wipe out a big chunk of savings (and debt, which is more the goal).

This environment — rising inflation/prices combined with ultra-low interest rates and the resulting lack of yields — will continue to create demand for alternative assets like bitcoin, for the next decade I’d guess. And whenever inflation gets truly serious, bitcoin will likely go parabolic once again.

Some of us cranks have been ranting about this stuff for years. But for the average  investor, realization is just now dawning. Many more are still in denial. But eventually everyone will have their own private epiphany. When they do, I suspect many will wish they had held onto some BTC. It’s shaping up to be the hedge to own for the next decade plus.

The post Explaining Bitcoin’s Rise From $6k to $56k in a Single Year appeared first on Early Investing.

Source: Early Investing

Why Crypto Experts Can’t See Dogecoin Hitting $1 Despite Elon Musk, Mark Cuban Backing

Dogecoin (CRYPTO: DOGE) will not find it easy to reach the $1 mark, even as the joke cryptocurrency attracts a celebrity fan following extending from Tesla Inc (NASDAQ: TSLA) CEO Elon Musk to Snoop Dogg. Experts have their say on the matter:

Reality Bites: Kadan Stadelmann, chief technology officer at Komodo, a blockchain solutions provider said on the topic of DOGE reaching $1, “we aren’t currently seeing this even with increased adoption by Mark Cuban and other NBA owners,” Cointelegraph reported.

“For it to genuinely be considered ‘future money,’ the narrative of DOGE as a meme coin will have to erode.”

It worth noting that Komodo recently launched a decentralized exchange dubbed DogeDEX for users to trade in the cryptocurrency without intermediaries such as brokers.

Math Doesn’t Add Up: Stadelmann brought up the amount of DOGE minted each day, which is 10,000 per minute or 14.4 million per day or 5.2 billion per year. The yearly uptick represents just over 4% of the total circulating supply of 128.701 billion DOGE. The joke cryptocurrency needs $806,000 of new fiat plus existing inflow to maintain its value of nearly $0.056 at press time.

DOGE co-founder Billy Markus said last month that for DOGE to reach would take market capitalization in excess of “actual companies that provide services to millions” like Boeing BA (NYSE: BA), Starbucks Corporation (NASDAQ: SBUX), and American Express Company (NYSE: AXP).

DOGE Is Fun And Games: Joel Edgerton, chief operation officer of bitFlyer, a cryptocurrency exchange told Cointelegraph that DOGE is more for fun rather than solving real-life problems and its value remains unproven.

“Any asset can reach a certain price target if people are willing to pay for it. However, that type of momentum investing, without underlying value, is pure speculation,” said Edgerton.

Some Contending Thoughts: Musk said last month that DOGE actually has an advantage over Bitcoin (CRYPTO: BTC) as even though the Shiba Inu-themed cryptocurrency seems…

Continue reading at YAHOO! FINANCE

 

3 Bitcoin ETFs Have Been Approved in North America

There are now three bitcoin exchange-traded funds (ETFs) in North America, all approved within the past month by Canada’s securities regulators. They are currently trading on the Toronto Stock Exchange. The latest approved bitcoin ETF, backed by Mike Novogratz’s Galaxy Digital, began trading Tuesday.

3 Bitcoin ETFs in Canada

Canada’s securities regulators have approved three bitcoin exchange-traded funds (ETFs) within the past month. The first approved North American bitcoin ETF was Purpose Bitcoin ETF, followed by Evolve Bitcoin ETF. Both are now trading on the Toronto Stock Exchange (TSX).

The third one is CI Galaxy Bitcoin ETF, which started trading on the TSX exchange Tuesday. This bitcoin ETF is trading under the ticker symbols BTCX.B and BCTX.U. The former trades unhedged in Canadian dollars while the latter trades in U.S. dollars. The announcement describes:

BTCX’s management fee of just 0.40% represents the lowest management fee of any bitcoin ETF in the world today.

The newest North American bitcoin ETF is managed by CI Global Asset Management, one of Canada’s leading investment managers. Galaxy Digital Capital Management LP, the Asset Management arm of Galaxy Digital, serves as the bitcoin sub-advisor and executes bitcoin trading on behalf of the ETF.

The announcement further details that “BTCX invests directly in bitcoin with its holdings priced using the Bloomberg Galaxy Bitcoin Index,” which tracks the performance of a single bitcoin in U.S. dollars. The index is owned and administered by Bloomberg Index Services Ltd.

CI Global Asset Management has several other crypto products. The firm launched the CI Galaxy Bitcoin Fund (TSX: BTCG) in December 2020, which it intends to merge into the ETF. Moreover, it is in the process of launching CI Galaxy Ethereum ETF, which it expects to become “the first ETF in the world to invest directly in ether.”

The fund manager has also “filed and obtained receipts for the preliminary prospectuses of CI Bitcoin and CI Ether Funds, which are mutual fund versions with the same investment objectives as BTCX and the Ether ETF, respectively,” the announcement adds.

Mike Novogratz, Chairman and Chief Executive Officer of Galaxy Digital, commented:

Bitcoin adoption has hit a tipping point and investors don’t want to sit on the sidelines.

Do you think the U.S. SEC will catch up to Canada and approve a bitcoin ETF soon? Let us know in the comments section below.

Source: Bitcoinnews.com

Bitcoin tops $1 trillion in value again as the cryptocurrency’s price jumps

Bitcoin’s value surpassed $1 trillion on Tuesday as the price of the cryptocurrency jumped.

The digital coin’s price rose on Tuesday and its market capitalization went above $1 trillion in mid-morning trade Singapore time, according to CoinDesk.

Bitcoin extended those gains hitting a 24-hour high of $54,348.57 in early afternoon Singapore time, around 7% higher than the same time a day before. Bitcoin has since pared some of those gains.

It is only the second time that bitcoin’s value has surpassed a $1 trillion after hitting that milestone for the first time on Feb. 19. Bitcoin’s market capitalization held above $1 trillion for a few days, before falling below that mark.

Even though bitcoin is sitting off of its all-time-high of $58,332.36, it has seen a huge rally. The digital currency is up over 80% this year and 570% higher over the last 12 months.

Bitcoin’s rally has been attributed to several factors including participation from larger institutional investors and some notable purchases from corporations. TeslaSquare and Microstrategy are among the companies that have purchased bitcoin.

On Sunday, a Chinese appmaker called Meitu said that it had purchased not only bitcoin, but another cryptocurrency called ether too. Ether, a cryptocurrency which runs on the Ethereum network, was trading at $1,836.73 at around 10:41 a.m. Singapore time, up nearly 7% from a day before, according to CoinDesk.

Companies are also making acquisitions in the cryptocurrency space. PayPal on Monday said it will buy cryptocurrency security firm Curv.

Proponents of bitcoin often liken it to…

Continue reading at CNBC.COM

 

Bitcoin Is Replacing Gold At An “Accelerating Pace”

The narrative taking place across the finance industry, is that cryptocurrencies like Bitcoin and Ethereum are the way of the future and gold’s days are numbered as a store of value.

While the “digital gold narrative” has already taken a major dent out of the precious metal’s momentum, according to a top Bloomberg Intelligence analyst, “most indicators point to” Bitcoin replacing the aging asset an an “accelerating pace.”

Bitcoin Is Replacing Gold As “Store Of Value In Investor Portfolios”

The term “gold standard” exists because the asset has stood the test of time as the best form of money the world has historically ever seen. Fiat currencies were once pegged to the precious metal, and today it still used as an investment and hedge against inflation or economic distress.

But that was a time before Bitcoin. Nearly everything that makes gold “precious” the cryptocurrency can do, and then some. And beyond the underlying protocol as an application layer, the asset’s fully transparent, hard capped supply of only 21 million BTC is perhaps the asset’s most valuable attribute – essentially raising the gold standard the precious metal itself set.

Bitcoin is in its infancy and will continuously be built upon, while gold will remain the same old store of value it has always been. The metal offers no upgradability, isn’t as scarce or transparent, is costly to move in large amounts – the list of ways Bitcoin beats gold could go on and on.

Which is exactly why Bloomberg Senior Commodity Strategist Mike McGlone says that “most indicators point” to the asset replacing gold at an “accelerating pace.”


Not So Fast: How Gold Could Make A Short-Term Comeback Against Crypto

McGlone is clear to say “most indicators,” because not all indicators are suggesting the pace will continue so sharply, at least for the time being. There’s no denying that gold’s days are indeed numbered as store of value compared to Bitcoin, and that trend will continue.

At a more than $10 trillion and $1 trillion respectively, the gold market cap and the Bitcoin market cap will likely come closer to parity over the next several years. But for now, a short-term correction where gold gains some ground against BTC, could be in the cards.

According to the TD Sequential on monthly timeframes, gold is poised for a reversal against Bitcoin. This could either be due to a collapse in Bitcoin, or a sizable increase in gold relative to the cryptocurrency.

It is important to note, however, that when assets are in a powerful enough trend, these signals can be ignored. For example, the TD 13 sell signal from the last major peak in Bitcoin barely caused a change in the tide for the precious metal.

The long term trend for Bitcoin is up, while gold could fall relative to the cryptocurrency for the foreseeable future. The only question for now, is will there be a short-term reversal to prepare for.


Source: Bitcoininst

Bitcoin Price to $1 Million in 10 Years ‘Very Reasonable’ Says Kraken CEO

With bitcoin currently enjoying a near 70% YTD increase, bullish predictions see the asset topping into a six or even seven-digit territory in the following decade. These projections came recently from Kraken’s CEO, Jesse Powell, and the Managing Director of Magnetic, William Quigley.

Bitcoin to $150K in the Next Year

Founded in 2010, Magnetic is an investment firm with a pro-cryptocurrency approach, having allocated funds in the industry as well. In a CNN appearance, the company’s Managing Director and Co-Founder, William Quigley, spoke about bitcoin’s future, price performance, and the impact of the COVID-19-induced financial crisis on the asset.

By referring to historical price developments after each halving, the executive forecasted a somewhat bullish projection that can take the cryptocurrency up to $150,000 in the following months.

“We are about half-way through the post-halving bull run, so, by my judgment, we have a lot more to go with bitcoin. Certainly – $100,000 and quite possible $150,000 by the end of this year or maybe Q1 next year.”

Quigley also touched upon the growing number of companies putting BTC on their balance sheet, which he classified as “huge.” He believes that the general narrative for corporations to allocate some of their trillions of dollars currently held in cash in government bonds is fading. Instead, they will continue to look for an asset with a finite supply, namely bitcoin.

He noted that the most critical issues for corporations are inflation and the diminishing of the dollar. In contrast, being a limited-supply type of asset, BTC could serve as a hedge with its decreasing inflation.

BTC to $1M, Says Kraken CEO

In another widely-bullish prediction, Jesse Powell, the CEO of the US veteran crypto exchange Kraken, said that the asset price is going to “infinity.”

When asked to specify in dollar terms what that amount would represent, Powell said that even reaching $1 million per bitcoin sounds “reasonable.”

“People that are believers in bitcoin see it’s going to replace all of the world fiat currencies, so that means basically whatever the market cap of the dollar is, the euro, all of that combined is what bitcoin could be worth.

In the near time, people see it surpassing gold as a store of value. So, a million dollars as a price target within the next ten years is very reasonable.”

He justified his quite optimistic prediction with the excessive amounts of fiat currencies printed by the US and other global superpowers following the COVID-19 pandemic. Additionally, Powell believes that the younger generations are keen to adopt the primary cryptocurrency, which could skyrocket its price.

Source: Crypto Potato

Bitcoin: Mother Of All Bubbles, Or Revolutionary Breakthrough?

If you think America’s politics are polarizing, consider Bitcoin. The price of a single Bitcoin today hovers around $50,000. Ten years ago, in its infancy, it was around a buck. The digital currency’s meteoric rise has minted millionaires and energized true believers around the world. That’s only convinced skeptics that Bitcoin is the mother of all bubbles.

In recent weeks, the price of Bitcoin has been driven higher following highly publicized investments from the carmaker Tesla and the life insurer MassMutual. Banks, MasterCard and the auction house Christie’s have all opened their doors to this kind of cryptocurrency, bringing it closer to the financial mainstream.

Before corporate America tiptoed in, there were people like Nikki Beesetti fascinated by Bitcoin’s promise. In 2017, Beesetti was an engineering major at Purdue University, facing typical college pressures, teaching on the side.

“I was getting paid about $10 an hour,” she says. “It was just enough money for me to buy, food, coffee, ramen.”

As an engineering student, she was curious about Bitcoin’s technology, its innovative design. And eventually as an investment. So she did a lot of research and spent $2,000 on a single Bitcoin.

“I sold at the end of the year when it was about $19,000,” she recalls.

The single Bitcoin she bought covered her tuition, books and lab fees. And it a way it changed her life. She’s still buying Bitcoin, still excited by its potential.

“Sometimes when you’re young a new technology can really excite you and can really shape your future and the way you look at the world,” she says. “I think that was the case for me and Bitcoin. It’s definitely made me more optimistic, definitely given me a lot of things to look forward to, especially in a time when things can seem so lonely and dreary.”

The Bitcoin maximalists

There’s a phrase for people who are all in on Bitcoin, not just to get rich, but as a revolutionary breakthrough. They’re called Bitcoin maximalists. George Mekhail is one of them.

Mekhail is a mortgage professional by day and the co-author of a book called “Thank God for Bitcoin” on the moral case for the cryptocurrency.

“I found something I believe in,” he says. “I found something that seems like it has a benevolent mission to sort of help humanity. And so I stuck around.”

He started buying Bitcoin in 2017 and has continued buying and holding ever since.

Here’s the maximalist case for Bitcoin: The cryptocurrency is free of politics, significant at a time when so many people mistrust the competence and intentions of government. It’s not controlled by central banks or leaders craving popular approval. Bitcoin is borderless. Bitcoin can’t be counterfeited, spent twice.

And here’s what might be the biggest argument of all on behalf of Bitcoin: The way it’s designed, only 21 million Bitcoins will ever exist. So, like gold, it is finite, which makes it a hedge against inflation. In contrast, the maximalist argument goes, governments can print endless amounts of money. So scarcity will keep Bitcoin valuable. There’s only so much of it.

Here’s the more expedient case for Bitcoin: FOMO, fear or missing out. From professional traders to ordinary people buying fractions of Bitcoin on apps like Robinhood, buzzy momentum has propelled Bitcoin into the stratosphere. Its price has appreciated more than 440% from a year ago. That’s why you might be hearing a friend or neighbor say, “I’m getting into crypto.”

The skeptics: “I don’t understand why its price isn’t zero”

Skeptics say the momentum can’t be sustained. They say a hard crash is inevitable, that unlike real estate or stocks or bonds, Bitcoin is an asset with no underlying value. “The idea that this thing is intrinsically valuable is, I think, misplaced,” says Robert Shiller, a Nobel Prize winning economist at Yale known for his work on bubbles.

A number of Nobel Prize winning economists have warned against Bitcoin, saying it is a speculative bubble. One of them, Oliver Hart, wrote to NPR in an email: “Like many economists I don’t understand why its price isn’t zero.”

From worthless to spectacularly valuable, the disparity of views on the value of Bitcoin is enormous. In part that’s because the cryptocurrency is…

Continue reading at NPR.ORG